On the 10th of October, a new front in the global tech and trade struggle erupted. Nexperia, a Netherlands-based semiconductor firm, became the center of a high-stakes export and control dispute involving the US, China, and European governments. The knock-on effects are now rippling deep into Europe’s auto sector. German automaker BMW has confirmed that parts of its supplier network are impacted by the conflict, prompting fresh warnings about how geopolitical tensions can swiftly disrupt industrial chains.
The Nexperia Flashpoint
Nexperia specialises in basic but high-volume chips: discrete components, MOSFETs, and logic devices, not the cutting-edge semiconductors that power AI or data centers, but essential parts used in automotive systems, consumer electronics, and power modules.
The situation escalated rapidly on the 6th of October, when the Dutch government invoked emergency powers under the Goods Availability Act to seize control of Nexperia, citing national security and fears over the potential transfer of technology to its Chinese parent company, Wingtech. In response, China imposed strict export controls on Nexperia’s operations within its borders, effectively restricting the shipment of certain components out of Chinese facilities. The United States, meanwhile, maintained its own firm stance, Wingtech had already been placed on Washington’s Entity List in late 2024 over alleged links to sensitive technology transfers.
Court filings later revealed that American officials had pressured Dutch authorities months earlier to remove Nexperia’s Chinese CEO, Zhang Xuezheng, warning that failure to do so might result in the company’s blacklisting. The leadership change did occur shortly before the Dutch state assumed control. Caught between competing regulatory regimes, Nexperia has since entered negotiations with both US and Chinese authorities in an attempt to resolve the dispute and regain operational stability.
BMW and the Automotive Ripples
When Nexperia’s status shifted overnight, Europe’s automakers immediately began to feel the tremors. BMW publicly acknowledged that “parts of our supplier network are affected,” though it emphasised that production continues uninterrupted for now. The company said it remains in close contact with suppliers to identify risks early and respond quickly if shortages emerge.
Other automakers have echoed similar caution. Mercedes-Benz confirmed it was monitoring developments closely but declined to comment on whether Nexperia directly supplies its parts, while Volkswagen stated that its production remains unaffected, though it remains vigilant and ready to adjust if the situation worsens.
The disruption poses a serious risk to the automotive industry because modern vehicles are deeply dependent on semiconductors. Thousands of chips are used in every car, powering everything from engine control units and safety sensors to infotainment systems and electric vehicle batteries. Even seemingly minor chip delays can bottleneck entire production lines.
The industry is still recovering from the 2020–2022 global semiconductor shortage that forced automakers to idle factories and delay model launches across Europe and Asia. Europe’s carmakers are also facing other pressures: competition from lower-cost Chinese EV manufacturers, tightening carbon regulations, and weakening consumer demand. In this context, another supply chain shock could have cascading effects, disrupting already delicate production schedules.
A 2024 European Commission report on the automotive ecosystem noted that Europe’s heavy reliance on non-EU suppliers for essential electronic components has become a structural weakness, one now exposed by the Nexperia episode.
A Proxy War in Supply Chains
The Nexperia dispute highlights how supply chains have become a new arena for geopolitical rivalry. What once looked like a trade skirmish now resembles a systemic contest over technological sovereignty. Over the past several years, US export controls on semiconductors have steadily tightened, particularly those targeting China’s access to advanced chipmaking tools. Some analysts describe the situation as a “tech decoupling,” where both superpowers are building separate and competing ecosystems.
Yet, not all experts are convinced that such controls can effectively contain innovation. A 2025 academic paper dubbed “Whack-a-Chip” argues that hardware-based restrictions are easily circumvented through alternative software architectures, mid-tier chips, and parallel production lines. This has made the regulatory environment both complex and porous, frustrating governments and companies alike.
What is clear, however, is that countries are increasingly willing to intervene directly in semiconductor firms, citing national security and technological autonomy. The Dutch government’s seizure of Nexperia underlines how European policy is being shaped not only by internal priorities but also by external pressure, particularly from the United States. This tension between European sovereignty and transatlantic alignment could deepen as nations grapple with where to draw the line between open markets and strategic control.
Strategic Lessons & Forward Paths
The Nexperia affair underscores several key lessons for both automakers and policymakers. First, supply diversification is no longer optional. Manufacturers that relied on just-in-time procurement and single-source suppliers now face mounting risks. Building a wider network of component producers and maintaining regional redundancies is essential to avoid bottlenecks.
Second, there is a growing push for onshoring and nearshoring production. The European Union has already launched the EU Chips Act, aiming to double the region’s share of global semiconductor manufacturing to 20% by 2030. Crises like Nexperia’s could accelerate those efforts and attract new public and private investment in mid-tier chip manufacturing within Europe.
Third, regional cooperation will be crucial. Emerging alliances, including BRICS, the Shanghai Cooperation Organisation, and African and Eurasian trade blocs, could become platforms for countries to pool demand and production capabilities, reducing dependence on US or China-dominated supply chains.
Finally, both firms and governments must learn to embed geopolitical risk directly into their long-term planning. This means scenario modeling for export bans, leadership changes, or government takeovers, as well as developing contingency logistics that can withstand sudden political shifts.
The Nexperia case may seem like a dispute over semiconductor patents and export rules, but it represents something far larger, a microcosm of the geopolitical technology struggle reshaping the global industrial order. When BMW admits that its supply network is under strain, it signals a deeper reality: even the most “ordinary” components can become strategic leverage in an era where technology, trade, and politics are inseparable.
For Europe’s automakers, the challenge ahead is to adapt to this new normal, one where industrial resilience depends as much on diplomacy and foresight as on engineering precision. The road to supply chain security is no longer just about efficiency; it’s about sovereignty.
Written by:
Chloe Maluleke
Associate at BRICS+ Consulting Group
Russian & Middle Eastern Specialist
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